Contracting Veteran Joins CSC
Monday, November 17, 2008
At 66, Michael J. Mancuso has served in top positions at some of the country's biggest contractors over the past four decades. Last week, CSC announced the heavy-hitter will come out of retirement to join the Falls Church information technology contractor as a vice president and chief financial officer.
Mancuso served as chief financial officer of General Dynamics for 13 years and became a senior vice president in 1997 before retiring in 2006. Before General Dynamics, he held several management positions at United Technologies, and prior to that he spent 22 years with General Electric. He remained active on several boards after retiring, in between running, golf and tennis. Rival defense contractor CACI International of Arlington said last week that Mancuso will step down from its board.
He starts Dec. 1 at CSC.
Mancuso's move comes as many analysts predict a cutback in government spending after years of rapid rise, particularly in defense spending. CSC, about 40 percent of whose business comes from federal information technology contracts, could take a hit, said one analyst. Some of its contracts are for jobs with shorter durations than, for example, building a fighter jet or ship, which can take more than a decade.
"Everyone is anticipating a slowdown in defense spending, and particularly IT spending will take a hit," said Brett Lambert, an expert in the intelligence and defense sectors and a managing director of Civitas Group. "I'm certain they're spending a lot of time in the boardroom at CSC figuring out how to weather this storm. What makes them unique is that most of their contracts spin out over a short period of time, so they're an easier target if you're trying to reduce spending."
On Friday, Mancuso, reached at his beachfront house in Avalon, N.J., chatted about his views on the credit crunch and economic crisis, the future of defense spending, and how he came to his decision to join CSC. According to a federal oversight group, CSC did roughly $4 billion worth of business last year with the federal government, including the Army, Air Force, Navy, Defense Information Systems Agency and the IRS.
Here are edited excerpts of the conversation:
QWhat do you think of the state of the overall economy?
ABroadly, my impressions aren't any different than those of most people's. We are in difficult times. With the financial industry in disarray and the effects of it cascading and touching other industries like automotive, as taxpayers we need to be concerned about the bailout, the magnitude of the bailout and how far it goes. We need to be convinced it will turn things around or lessen the severity of the probable recession we're in now.
My primary concern from a corporate standpoint is liquidity. And the other thing is jobs and the effect on the economy. Corporations can't operate without liquidity, access to credit. If we can't get banks back loaning money again and get the commercial paper system working again, then economic growth is going to stall and this recession is going to get much, much worse.
You could see unemployment approaching 10 percent nationwide. That will touch every industry from banking to housing.